The Board of Directors of MolMed S.p.A., chaired by Prof. Claudio Bordignon, today reviewed and approved the interim financial report at 30 September 2013. The most important elements were: TK: expansion in the US of the pivotal Phase III trial for high-risk leukaemia patients; NGR-TNF: continuation of the clinical development program; the increase of revenues to € 3.1 million from development of new cell and gene therapy treatments for third parties.
Milan (Italy), 11 November 2013 – The Board of Directors of MolMed S.p.A. (MLM.MI), chaired by Prof. Claudio Bordignon, today reviewed and approved the interim financial report at 30 September 2013. The most important elements were:
- TK: expansion in the US of the pivotal Phase III trial (TK008) for high-risk leukaemia patients;
- NGR-hTNF: continuation of the clinical development program, in particular with the achievement of new statistically significant results on the increase in overall survival of patients treated weekly with low doses NGR-hTNF in combination with doxorubicin in the randomised Phase II study in soft tissues sarcomas;
- The increase of revenues to € 3.1 million (+11.9% compared to the first 9 months 2012) from development of new cell and gene therapy treatments for third parties.
Claudio Bordignon, Chairman of the Board and CEO of MolMed, commented: “Consistently with the first half of 2013, the last quarter was characterized by important confirmation on the potential of both our investigational antitumoral therapeutics: TK and NGR-hTNF. As far as TK is concerned, the expansion of the Phase III clinical study in the United States opens a new important frontier for the company, with an important sign of interest by prestigious American clinical centers participating in the study.
With regard to NGR- hTNF, the analysis of the randomized Phase II trial of NGR -hTNF in soft tissue sarcomas showed – in addition to what was already observed last year in terms of progression-free survival – a statistically significant increase in overall survival for those patients included in the arm treated with the 0.8 µg/sqm dose of NGR-hTNF administered weekly in combination with doxorubicin. These results confirm the previously observed effectiveness of NGR-hTNF in various cancer indications and validate the choice of the low doses administered weekly utilized in the treatment of malignant pleural mesothelioma currently in Phase III, with results expected between December 2013 and January 2014.
The activities in development and production of cell and gene therapies confirmed the leadership of the Company is playing at an international level is confirmed by the results obtained in this field and by the constant increase in revenues”.
Highlights of financial data
Key income statements
Key achievements in the first nine months of 2013
Research & Clinical Development activities
In the first nine months of 2013, the Company’s activities focused mainly on clinical development of its two investigational anticancer therapeutics: TK for the treatment of high-risk leukaemia and NGR-hTNF for the treatment of a number of solid tumours.
TK main achievements include:
- expansion in the US of the pivotal Phase III trial (TK008) of its proprietary TK cell therapy for high-risk leukaemia patients. The study, already ongoing in Europe, foresees patient enrolment in 16 clinical centres in Europe, United States and Israel;
- presentation at ASCO 2013 and at the BMT Tandem Meetings 2013 of positive long-term safety and efficacy data with its cell therapy product TK for the treatment of hematologic malignancies with bone marrow transplantation from partially matched (haplo-identical) donors. The seven year follow-up analysis of this large patient population indicates that overall and disease-free survivals from haploidentical family donors are fully comparable to those obtained from fully matched donors;
- progress on dossier preparation in order to file for a market authorisation application for TK through a special procedure (Conditional Marketing Authorisation) with the European Medicines Agency. This request is based on the rarity of the indication (TK has obtained Orphan Drug designation), the favourable risk/benefit ratio and the demonstration of safety and clinical efficacy obtained in more than 120 patients treated so far. The Company expects to file this request with the European authority in 2013.
NGR-hTNF main achievements include:
- presentation at the European Cancer Congress 2013 (ECCO-ESMO-ESTRO) of new data showing a statistically significant doubling of the median survival – associated with a favourable tolerability profile – of patients treated weekly with low doses NGR-hTNF in combination with doxorubicin in the randomised Phase II study in soft tissues sarcomas;
- completion of patient enrolment in a randomised Phase II trial in platinum-resistant/refractory ovarian cancer patients. Results of the study are expected in the first half of 2014;
- presentation at ASCO of positive results from a randomized Phase II study evaluating safety and efficacy of its investigational drug NGR-hTNF in combination with standard chemotherapy for the first-line therapy of non-small cell lung cancer (NSCLC) patients with squamous histology. The addition of NGR-hTNF to standard chemotherapy induced a two-fold higher tumour shrinkage and, most importantly, a statistically significant 50% reduction in the risk of death compared to chemotherapy alone (p=0.04). Notably, these efficacy outcomes were coupled with a favourable tolerability profile.
Development and GMP production for third parties
Development and production of new cell and gene therapy treatments for third parties are consolidating the company’s technological leadership in this field, and are also generating a significant increase in revenues (as described in the Comments to financials). During the first nine months of 2013, activities continued under two major agreements signed in 2011, respectively with Telethon Foundation and GlaxoSmithKline, for the development and production of investigational gene therapies for a total of seven rare diseases. Furthermore, the GMP production facility has been upgraded and optimized.
Of particular relevance is the publication of results obtained by the Telethon Foundation concerning two of the gene therapies for which MolMed develops and manufactures viral vectors and transduces patients hematopoietic stem cell, on July 11th in Science, one of the most internationally renowned scientific journals.
Comments to financials
First nine months of 2013
Revenues in the first nine months of 2013, amounting to € 3.4 million, increased by 11.3% compared to the first nine months of 2012. This increase is due to the intensification in the development and GMP production activities for third parties. The abovementioned activities generated revenues of € 3.1 million compared to € 2.8 million in the corresponding period of 2012, with an increase of 11.9% respect to the first nine months of last year. Other revenues related to public funding for research and development activities, for € 308 thousand, showed an increase compared to the same period of 2012.
Operating costs for the first nine months of 2013 totaled € 17.9 million and show a decrease of € 2.2 million respect to the first nine months of 2012 (€ 20.1 million). The decrease of 10.9% in operating costs is mainly due to a reduction of services costs.
The operating loss for the first nine months of 2013, of € 14.5 million, has been reduced by 14.9% respect to the same figure of the previous year of € 17.0 million.
Financial results are negative for € 170 thousand, decreasing from € 450 thousand respect to the first nine months of 2012. Financial income, for € 143 thousand (€ 682 thousand at 30 September, 2012) is primarily derived from the management of the Company’s cash through temporary, low-risk investments. The decrease of such income in the period is mainly due to the progressive reduction of financial resources due to the absorption of liquidity for ordinary business and to lower rates of return of the market. Financial costs, € 313 thousand in the first nine months of 2013, are mainly due to the pro solute of VAT receivables transaction finalized in the second quarter of 2013.
The result for the first nine months of 2013 show a loss of € 14.7 million, compared to a loss of € 16.7 million in the corresponding period of 2012.
Third quarter of 2013
In the third quarter of 2013, operating revenues totalled € 685 thousand, compared to € 639 thousand in the third quarter of 2012. Operating revenues include € 613 thousand in revenues from development and production for third parties, higher, in this quarter, respect to the same period last year, due above all to development and GMP production activities for third parties.
Operating revenues also consist of € 72 thousand in other income, related to public funding for research and development activities in line with the same period of 2012.
In the third quarter of 2013, operating costs amounted to € 5.1 million, respect to € 6.6 million in the third quarter of 2012. This downward trend is mainly due to a decrease in services costs compared to the concentration of costs sustained in the last three quarters of 2012 for the development of NGR015 and to costs related to pivotal Phase III trial, for which patient enrolment was completed at the end of 2012.
The operating result for the third quarter of 2012 was negative for € 4.4 million, compared to a loss of € 6.0 million in the same period of 2012.
In the third quarter of 2013 result of financial management is negative for € 24 thousand. The negative result is mainly due to financial costs related to the VAT receivables pro solute transaction finalized in the first half of 2013.
The result for the third quarter of 2013 shows a loss of € 4.5 million, respect to a loss of € 6.0 million in the corresponding period of 2012.
Net financial position
The net financial position at 30 September 2013 amounts to € 10.0 million, and includes cash and cash equivalents for € 12.0 million, financial debt related to the accounting of financial leasing for laboratory equipment for € 33 thousand and long term financial debts for € 2.0 million related to the recording of the pro solute transaction of VAT receivables.
It is relevant to note that the Shareholders, members of the shareholders’ agreement, who previously communicated their availability to support the Company in carrying out its industrial and development plans until 31 August 2014, for a total amount of €4.3 million, on 11 November 2013 have communicated their availability to extend their commitment up to, but not beyond, 30 November 2014 and limited to a total amount of €7.1 million.
The official Corporate Financial Reporting Manager of MolMed S.p.A., Andrea Quaglino, herewith attests, pursuant to Article 154-bis, paragraph 2 of the Italian Consolidated Law on Finance (Legislative Decree 58/1998), that the accounting disclosure contained in this press release matches documentary evidence, corporate books, and accounting records.
In this press release, use is made of “alternative performance indicators” which are not provided for under European IFRS, and whose significance and content – in line with Recommendation CESR/05-178b published on 3 November 2005 – are illustrated below:
- Operating Result: defined as the difference between sales revenues and other income and costs for materials, costs of services received, costs for use of third-party assets, personnel costs and amortisation, depreciation & write downs. It represents the profit before financial flows and taxes;
- Net Financial Position: is the algebraic sum of cash, cash equivalents, financial receivables and other financial assets, and current and non-current financial debt.
This press release is written in compliance with public disclosure obligations established by CONSOB (Italian securities & exchange commission) resolution no. 11971 of 14 May 1999, as subsequently amended.
MolMed S.p.A. is a biotechnology company focused on research, development and clinical validation of novel anticancer therapies. MolMed’s pipeline includes two antitumour therapeutics in clinical development: TK, a cell-based therapy enabling bone marrow transplants from partially compatible donors, in absence of post-transplant immune-suppression, in Phase III in high-risk acute leukaemia; NGR-hTNF, a novel vascular targeting agent, in Phase III in malignant pleural mesothelioma and in Phase II in six more indications: colorectal, lung (small-cell and non-small-cell), liver and ovarian cancer, and soft tissue sarcomas. MolMed also offers top-level expertise in cell and gene therapy to third parties to develop, conduct and validate projects from preclinical to Phase III trials, including scale-up and cGMP production of clinical-grade viral vectors, and manufacturing of patient-specific genetically engineered cells. MolMed is headquartered at the San Raffaele Biomedical Science Park in Milan, Italy. The Company’s shares are listed on the main market (MTA) of the Milan Stock Exchange. (Ticker Reuters: MLMD.MI)
Financial statements at 30 September 2013
Statement of comprehensive income
Net financial position